Cheap imports fall in a grey area

AUSTRALIAN retailers are slashing the cost of gadgets by doing what many of their customers have threatened: buying goods overseas.

Rather than relying on local distributors, some retailers are saving hundreds of dollars on each gadget in deals with international firms.

JB Hi-Fi has just joined the trend, called grey-market or direct importing, while chain Gametraders and online store Kogan Technologies continue to embrace overseas imports.

But the controversial trend is not going down well with device makers, and even retailers are warning customers to ensure they are covered by local warranties before clicking the "buy" button.

It is also causing strange anomalies where a product costs hundreds of dollars more in a bricks-and-mortar store than on its website.

JB Hi-Fi joined the trend this month, though its grey-market goods are available only in one section of its website.

Canon and Nikon DSLR cameras, lenses and flashes feature in the new section at significant discounts. A Canon 600D twin-lens kit is available in the Direct Import section of JB Hi-Fi's website for $915 - $371 less than on a different page of the same site.

Direct import customers buy directly from JB Hi-Fi's overseas distributor, with each order accepted only after the distributor has confirmed it is available. Customers who place orders over $1000 could be charged GST.

National Retail Association executive director Gary Black says this situation is being forced upon Australia's tech stores in the absence of a "level playing field".

Black says distributors often set higher wholesale prices for Australian stores and, when combined with GST not applying to imports under $1000, these stores are disadvantaged.

"The Australian retail sector will find it increasingly difficult to compete in the face of this highly inequitable state of affairs and it is driving a lot of entrepreneurial practice," Black says.

"Some retailers are actively looking at establishing overseas websites or overseas processing centres where they can offer consumers the chance to buy directly from overseas."

Australian retailer Kogan Technologies began offering discount grey-market imports on its website in September, including Apple and Motorola tablets, Samsung and HTC smartphones, and high-end Nikon and Canon cameras. The online store offers savings of up to $120 on an Apple iPad and $770 on a Canon 5D Mark II camera body.

"They appear to be using Australian customers as pawns in their battle with their suppliers and offering prices that they themselves admit they can't guarantee," he says. "If it was a genuine attempt to give their customer what they wanted, then JB would loudly and proudly advertise their new direct import offering." Other retailers are embracing grey imports for different reasons. Gametraders is using overseas imports as a way to access big-name games, save costs and, in some cases, receive games before their local release.

National marketing manager Rob Jenkins says some game distributors will not deal with small retailers, like the 30-store chain, while others offer much cheaper prices to department stores.

"There have been instances where department stores are selling a game on day one, like Call of Duty last year, for $2 less than our wholesale price," Jenkins says.

"With grey imports, people are still getting the same gaming experience - we ensure they're not going to have any problems - and we're looking after both the customer and our franchisees."